VAT on Amazon advertising for books sold in US marketplace?

Hi HMRC I would like to clarify the VAT situation with regards to my company, which is voluntarily VAT-registered, and sells print-on-demand books on Amazon KDP. The primary marketplace is the US with over 80% of book sales made there. (1) Am I correct that book sales made in the UK would be shown as zero-rated on the VAT return, and all other book sales from other countries outside of the UK are outside the scope of VAT? (2) The company advertises its books on Amazon in the US marketplace (only). Amazon Advertising LLC invoices for these advertising services, inclusive of standard-rate VAT. As all sales related to the advertising services are made in the US, would the place of supply be the US instead of the UK, and therefore reverse charge would not apply? If so, then should the VAT paid on these invoices be reclaimed in the same way as any other invoice where expenses are incurred in the UK? Or should Amazon Advertising LLC not be charging any VAT for the advertising made as it is exclusively in the US marketplace? Thank you.

Hi, is it possible to get a response to this please?

Hi,

If you are selling ebooks in the UK then these should be zero rated supplies. You can see guidance here:

E-publications

If you are selling these digital services to customers outside the UK then these should be outside the scope of VAT.

The place of supply of digital services

Please also see the guidance where you are selling these services via an online platform:

Digital portals, platforms, gateways and marketplaces

If the marketplace is charging your business from overseas and your business belongs in the UK then we would expect for the VAT to be accounted for on the reverse charge by your business. Please see the guidance below:

Reverse charge

If the marketplace are charging you from their branch in the UK then they would need to charge you UK VAT because of the place of supply rules. Please see below:

The place of supply rules for services

If you have been charged VAT correctly and this VAT has been incurred in the course of your business then the VAT can be treated as input tax if the conditions are met below:

Introduction to input tax

Thank you.

Thank you. Please can I clarify on the reverse charge—my business does belong in the UK, and if the marketplace is charging from overseas, but all the charges from overseas relate to items that are sold to customers outside of the UK and therefore outside of scope for VAT, will I still need to account for this on the basis of reverse charge?

Hi,

Yes if the marketplace belongs outside of the UK for this supply to you then you should use the reverse charge in the UK to account for the VAT.

Please see the guidance below:

Place of supply of services (VAT Notice 741A) Section 5

Thank you.

Thank you.